Does it count the free pill that is given to the character you play on that round? Like if you put 2 pillz on the character that makes it 1+2 pill so technically that's 3 pillz right?
Yes the free pill counts, but its not really a "free pill" its just your cards base power.
If you add 2 pillz to the 1 that 'free' pill you get from the card's base power, and are defeated, you will get 2 pillz back. So yes, it is counted.